Chapter B
Financial resources invested in education
Archived Content
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please "contact us" to request a format other than those available.
B1. Expenditure per student
B2. Expenditures on education as a percentage of GDP
B3. Distribution of expenditures on education
B1 Expenditure per student
Context
This indicator provides information on the investment, from all sources, in each student in public and private institutions at several levels of education. Expenditure by educational institutions per student is largely influenced by teachers' salaries (see Indicators B3 and D2), pension systems, teaching and instructional hours (see Indicator D1), the cost of teaching materials and facilities, the program provided (e.g., general or vocational), and the number of students enrolled in the education system. Policies to attract new teachers or to reduce average class size or change staffing patterns have also contributed to changes in expenditure by educational institutions per student over time. Ancillary and research and development (R&D) services can also influence the level of expenditure by educational institutions per student.
Effective schools require the right combination of trained and talented personnel, appropriate curriculum, adequate facilities and motivated students who are ready to learn. The demand for high quality education, which can translate into higher costs per student, must be balanced against other demands on public expenditure and the overall burden of taxation. Although it is difficult to assess the optimal volume of resources needed to prepare each student for life and work in modern societies, international comparisons of spending by educational institutions per student can provide useful reference points.
Policy-makers must also balance the importance of improving the quality of educational services with the desirability of expanding access to educational opportunities, notably at the tertiary level. In addition, decisions regarding the allocation of funds among the various levels of education are key. For example, certain provinces and territories emphasize broad access to higher education and some invest in near-universal education for children as young as 3 or 4 years of age.
Observations
The indicator shows direct public and private expenditure by educational institutions1 in relation to the number of full-time equivalent students enrolled. Note that variations in expenditure by educational institutions per student may reflect not only variations in the resources provided to students (e.g., variations in the ratio of students to teaching staff) but also variations in relative salary and price levels.2
Expenditure by educational institutions per student
Data on annual expenditure per student at the primary and secondary education levels provide a way to track the financial investment in each student. Covering all levels from pre-primary to upper secondary education, average expenditure per student in Canada was $10,438 in 2007 (Table B.1.1.1). The numbers were much higher in the territories: $20,299 in the Yukon, $18,583 in the Northwest Territories, and $15,605 in Nunavut. Elsewhere, the highest expenditures are seen in Manitoba ($11,263) and Alberta ($11,022), and the lowest in Prince Edward Island ($8,766) and New Brunswick ($9,251).
Table B.1.1.1 Annual expenditure by educational institutions, per student for all services, by educational level, Canadian dollars, Canada and jurisdictions, 2007Expenditure per student at the secondary level generally exceeds that at the primary level (Table B.1.1.1). This is true in most provinces and territories, but not in the Yukon, Prince Edward Island and British Columbia. In 2007, the difference was small in New Brunswick, Quebec and Manitoba. The largest differences are evident in Saskatchewan (where expenditure at the secondary level was 48.1% higher than at the primary level), Newfoundland and Labrador (29.8%), Nunavut (37.3%), Alberta (30.8%) and Nova Scotia (25.3%).
In the OECD countries as a whole, expenditure on core educational services accounted for an average of 93% of the expenditure per student on primary and secondary education. In Canada at the primary and secondary levels, the portion of expenditure per student allocated to core services ($9,899) represented 95% of the total expenditure per student in 2007, while the $539 for ancillary services represented approximately 5% of the total (Table B.1.2.1; Chart B.1.1). The amounts varied little from province to province. Expenditure per student on ancillary services was $675 (6.6%) in Quebec, $635 (6.1%) in Newfoundland and Labrador, and $331 (3.3%) in British Columbia. By contrast, much less was spent on ancillary services in the territories: $223 (1.4%) in Nunavut, and less than 1% in the Northwest Territories and Yukon ($138 and $166, respectively).
Chart B.1.1 Annual expenditure by educational institutions per student in primary and secondary education, by type of services, Canada and jurisdictions, 2007To compare Canada with other OECD countries,3 the expenditure per student was converted to a common currency using purchasing power parities (PPPs) (Table B.1.1.2; Chart B.1.2). The OECD data (2008) indicate that countries spent an average of $7,153 (US dollars) on primary education (ISCED level 1) per year per student. The comparable average for Canada was $8,114 (ISCED levels 0 to 2). In all provinces and territories, these US dollar figures were above the OECD average. Figures were lowest in Saskatchewan ($7,226) and New Brunswick ($7,393), while the highest were in British Columbia ($8,847), Manitoba ($8,993) and the territories—from $11,522 in Nunavut to $19,449 in Yukon.
OECD countries spent an average of $9,396 per student on secondary education (Table B.1.1.2; Chart B.1.2), approximately 31% more than on primary education. In Canada, expenditure on secondary education (at $9,005 per student) was only 11% greater than on primary education. Five provinces (Prince Edward Island, British Columbia, New Brunswick, Quebec and Manitoba) presented such expenditure per student lower than the OECD average.
Expenditure per student on university education in Canada, including research and development, averaged $30,317 (Canadian dollars) in 2007 (Table B.1.1.1). Such spending was most noticeably above the Canada-level average in Alberta (32% above), British Columbia (18%), Prince Edward Island and Saskatchewan (12%).
When spending on research and development is excluded, the Canadian average expenditure per student on university was $19,362 in 2007. Such spending exceeded this figure by more than 30% in Alberta, Saskatchewan, and British Columbia. Expenditure on research and development (Table B.1.2.1) ranged from $6,911 per student in New Brunswick and $8,365 in Saskatchewan to $12,619 in Quebec and $13,315 in Alberta. In Quebec, it represented 43% of the total expenditure per student at the university level. By contrast, in Saskatchewan, it represented only 25% of the total. Ancillary services cost the least in Quebec ($781) and Manitoba ($1,133), and the most in Nova Scotia ($2,310) and British Columbia ($2,796).
It was not possible to compare expenditure on university education with the OECD average, because this year the OECD provided a total for tertiary education, but no detail for the university level.
Comparisons of expenditure per student at different levels of education highlight the relative emphasis placed on these levels, as well as the relative unit costs of provision. Expenditure per student increases with the level of education in almost every province, but the relative difference between the levels varies from one province to another. On average, the ratio of expenditure per student on university education to expenditure per student on primary education was 3.03:1 in Canada (calculated from figures in Table B.1.1.1). This ratio ranged between 2.72:1 and 2.94:1 in Nova Scotia, New Brunswick, Quebec, Newfoundland and Labrador, and Ontario. It was lower in Manitoba (2.45:1) and higher in Prince Edward Island, Saskatchewan, Alberta, and British Columbia (between 3.28:1 and 3.93:1).
Definitions, sources and methodology
Data refer to the 2007/2008 financial year (April 2007 to March 2008) and are based on the UOE data collection on education statistics administered by the OECD in 2010 (for more information, see Annex 3, www.oecd.org/edu/eag2011).
Expenditure by educational institutions per student at a particular level of education is calculated by dividing the total expenditure by educational institutions at that level by the corresponding full-time equivalent enrolment. Only educational institutions and programs for which both enrolment and expenditure data are available are taken into account. In accordance with the OECD definition provided in the data collection manual, debt servicing expenditures are excluded.
For Canada, financial data for elementary and secondary school levels are based on five Statistics Canada surveys: the Survey of Uniform Financial System – School Boards; the Elementary-Secondary Education Statistics Project (now known as the Elementary-Secondary Education Survey, ESES); the Survey of Federal Government Expenditures in Support of Education; the Survey of Financial Statistics of Private Elementary and Secondary Schools; and the Provincial Expenditures on Education in Reform and Correctional Institutions survey. The last two are now inactive, but the figures are estimated based on data from previous years.
The financial data obtained at the elementary and secondary levels are not divided by level. Given that salaries are the largest financial item, the expenditures are broken down by level based on an estimate of the payroll at each level. The ESESP does not provide details on teachers per level. The 2006 Census was used to determine, in each province and territory, the number of teachers who reported teaching at the elementary and secondary levels, as well as the average salaries they reported. Payroll was calculated by multiplying the number of teachers by the average salary.
The manner in which enrolment was weighted between elementary and secondary levels is implicit in the definition of secondary school, which varies from Grades 7 to 11 (Quebec), 8 to 12 (British Columbia), 9 to 12 (New Brunswick, Ontario and Manitoba), up to 10 to 12 (Newfoundland and Labrador, Prince Edward Island, Nova Scotia, Saskatchewan, Alberta, Northwest Territories, Yukon and Nunavut), given that teachers report whether they teach at the elementary or secondary level, and given that the definition of secondary school varies by province. A different weighting was applied when calculating the figures for Canada that appear in Education at a Glance 2011: OECD Indicators. In that publication, enrolment for Canada at the secondary level was defined as Grades 9 to 12. The weighting factors were based on public school enrolment (ESESP) in the 2007/2008 school year, and applied to the total weighted enrolment corresponding to the 2007/2008 financial year.
At the university level, the financial data were drawn from the Financial Information of Universities and Colleges Survey (FIUC), done in conjunction with the Canadian Association of University Business Officers (CAUBO), and the Survey of Federal Government Expenditures in Support of Education. The enrolment figures come from the Postsecondary Student Information System (PSIS); figures for the 2006/2007 and 2007/2008 school years were used. Enrolment was converted into full-time equivalents and the number of part-time students was divided by 3.5. Then the two school years were weighted to correspond to the 2007/2008 financial year (April 2007 to March 2008) by applying 5/12 of the first and 7/12 of the second.
For comparison with the OECD, expenditure in Canadian currency was converted into equivalent US dollars by dividing the national currency figure by the purchasing power parity (PPP) index for the gross domestic product (GDP). The PPP index was used because the market exchange rate is affected by many factors (interest rates, trade policies, economic growth forecasts, etc.) that have little to do with current relative domestic purchasing power in different OECD countries. Expenditure data are not adjusted for the differences in the cost of living across the provinces and territories.
Educational services are the expenditure portion that covers the real mission of educational institutions, which is to provide education. There are also expenditures on auxiliary services, which have two main components: student welfare services (transportation, lodging and meals) and services for the general public (museums, radio and cultural programs).
Research and development includes subsidies received by the institution for research projects and an estimate of the proportion of other current expenditures allocated to research and development. It is important to note that the expenditure on research and development is estimated.4 The notable differences observed between provinces when global expenditure is broken down into core services, research and development, and ancillary services can be partly explained by differences in the accounting of expenditures among the funds.
The OECD average is calculated as the simple average over all OECD countries for which data are available.
Note: The corresponding OECD indicator is B1, How much is spent per student?.
B2 Expenditure on education as a percentage of gross domestic product (GDP)
Context
This indicator provides a measure of the proportion of national wealth that is invested in educational institutions by linking public and private expenditures with gross domestic product (GDP).
Expenditure on education is an investment that can help foster economic growth and enhance productivity. Education contributes to personal and social development and reduces social inequality. The allocation of financial resources to educational institutions is a collective choice, made by government, business, and individual students and their families. It is partially influenced by the size of the school-age population and enrolment in education, as well as the country's relative wealth.
Observations
GDP allocated to educational institutions
With 6.0% of its GDP allocated to educational institutions in 2007, Canada devoted slightly more than the 5.9% average estimated by the Organisation for Economic Co-operation and Development (OECD), based on the member countries for which comparable data were available) (Table B.2.1). Iceland, Korea, Norway, Israel, United States, Denmark, Chile, New Zealand, Belgium and Sweden devoted more of their GDP to educational institutions than did Canada. Estimates for several other OECD countries, France (6.0%), Finland (5.9%), Estonia (5.8%) and Mexico (5.8%) were similar to the figure for Canada.5
The financial commitment to educational institutions also varied from one province or territory to another (Chart B.2.1). While 3.7% of Alberta's GDP was invested in educational institutions in 2007, more than three times that proportion was invested in Nunavut (13.0%), and more than double was invested in Yukon, Prince Edward Island (7.9%) and Nova Scotia (7.7%). The proportion of provincial GDP invested in education in these jurisdictions not only exceeded the Canada-level average, but it was also higher than the OECD's overall average, as well as the OECD estimate for the United States (7.2%). Estimates for several other provinces—Manitoba, Quebec, New Brunswick and Ontario—were also higher than the Canada average (6.0%), while the estimates for British Columbia (5.9%) and Saskatchewan (5.8%) closely mirrored it, and the figure for the Northwest Territories was slightly lower (5.4%). In Newfoundland and Labrador (4.4%) and Alberta (3.7%), the proportion of GDP allocated to education was noticeably below the national figure. It should be noted, however, that in Alberta, the low relative proportion of GDP devoted to education cannot be attributed to low amounts allocated to educational institutions; instead, it is due to relatively high provincial wealth. Alberta's per capita GDP is almost twice that of Quebec's, but the amounts invested in education depend more on the number of students in the system than on the relative wealth of the province. On a per capita basis Alberta and Quebec invest nearly the same amounts in education.
Primary, secondary and postsecondary non-tertiary education
Overall, in the OECD countries, close to two-thirds of the expenditure on educational institutions was for primary, secondary and postsecondary non-tertiary education (Table B.2.1). This is not surprising, since primary and lower secondary education is compulsory and enrolments in upper secondary education are generally high. In Canada, 57.8% (3.5% of 6.0%) of the national wealth invested in education in 2007 was spent on these types of education, less than the 63.6% (3.8% of 5.9%) average for the OECD countries.6
In all provinces and territories, over half of the money spent on education in 2007 went towards primary, secondary and postsecondary non-tertiary education (Table B.2.1, column 2 as a percentage of column 9). Half of the provinces, Manitoba, Alberta, Ontario, Saskatchewan, New Brunswick, and the Northwest Territories exceeded the 57.8% average for Canada. Calculations for the remaining provinces reveal proportions below the Canadian average, ranging from 51.9% in Prince Edward Island to 56.5% in Newfoundland and Labrador. More than 70% of the spending on education in the Yukon and Nunavut was for primary, secondary and postsecondary non-tertiary education.
Share spent on tertiary education
In 2007, 42.2% (2.5% of 6.0%) of the share of the GDP that Canada invested in education was allocated to the tertiary sector (Table B.2.1, column 6 as a percentage of column 9). This means that, among the OECD countries, Canada, along with the United States (37.5%), allocated the largest share of education spending to tertiary education.
In Prince Edward Island, 48.1% (3.8% of 7.9%) of the money spent on education went towards tertiary education (Table B.2.1; Chart B.2.1). The figures for Newfoundland and Labrador, Quebec, Nova Scotia, and British Columbia were also above the Canada average of 42.2%. For New Brunswick and Saskatchewan, the corresponding estimates were close to the Canada average, while the estimates for Ontario, Alberta, Northwest Territories, and Manitoba were below the national average for 2007. With few schools at the tertiary level, the percentages spent for the Yukon and Nunavut were, as expected, well below the average for Canada, less than 30.0%.
Definitions, sources and methodology
This indicator shows expenditure (public and private) with regard to educational institutions as a percentage of gross domestic product (GDP), by level of education and for all levels of education combined.
"Expenditure on educational institutions" includes spending on both instructional and non-instructional educational institutions. Instructional educational institutions are entities that provide instructional programmes (e.g.,teaching) to individuals directly in an organized group setting or through distance education.7 Non-instructional educational institutions are entities that provide advisory, administrative or professional services to other educational institutions but do not enrol students themselves.
The financial data for Canada were drawn from seven Statistics Canada surveys8 and exclude expenditure related to debt service. GDP data were provided by the System of National Accounts Branch. All data for Canada, the provinces and territories refer to the 2007 financial year. The OECD averages (for the 2008 financial year) are based on the UOE data collection on educational systems, conducted jointly by three international organizations (UNESCO, the OECD and Eurostat) and administered by the OECD in 2010.
Note: The corresponding OECD indicator is B2, What proportion of national wealth is spent on education?.
B3 Distribution of expenditure on education
Context
This indicator outlines spending on education services and resources, identifying the proportion of budgets allocated to current and capital expenditures. A breakdown of current spending—compensation of teachers, other staff and other expenses—is also presented.
The distribution of expenditures may be influenced by a number of factors, including compensation for teachers, the generosity of pension plans, the size of the non-teaching staff, and the different needs for infrastructure. Budget allocation can affect the quality of services, the condition of equipment, and the ability of the education system to adapt to changes in enrolments. Both budgetary and structural decisions taken at the system level have repercussions extending into the classroom: they influence the nature of instruction and the conditions in which it is provided.
Observations
Current expenditure
The proportions of education expenditure allocated to current spending were relatively high in Canada in 2007 (most recent data available9): 93% for primary, secondary and postsecondary non-tertiary education, and 90% for tertiary (Table B.3.1; Charts B.3.1.1 and B.3.1.2). These figures are fairly similar to the average proportions reported by the Organisation for Economic Co-operation and Development (OECD) for its member countries: 92% and 91%, respectively.10,11 Current expenditure reflects spending on school resources that are used each year for the operation of schools.
The relatively high spending on current resources is also mirrored across the provinces and territories. The share of education spending allocated to current expenditure was close to or higher than 90% in both the primary, secondary, postsecondary non-tertiary and tertiary categories in almost all provinces and territories (Table B.3.1; Charts B.3.1.1 and B.3.1.2).
According to recent data from the OECD, the relative share of current expenditure varied considerably from one country to another: from 82% in Luxembourg to 98% in Austria, Chile, and Portugal at the primary, secondary and postsecondary non-tertiary level, and from 79% in Spain to 95% or more in Belgium, Sweden, Finland, Denmark and Chile at the tertiary level.
Compensation of staff
Current expenditure is subdivided into three broad categories: compensation of teachers; compensation of other staff; and other current expenditure (teaching materials and supplies, regular maintenance and cleaning of school buildings, preparation of students' meals, and rental of school facilities). For primary, secondary and postsecondary non-tertiary education, the compensation of staff (78%)—particularly teachers (62%)—accounted for the largest proportion of current expenditure in Canada in 2007, a situation mirrored in the OECD countries in general (Table B.3.1; Chart B.3.2.1). At the tertiary level in Canada, 63% of current expenditure was devoted to compensation of all staff; 37%, to compensation for teachers (Chart B.3.2.2).
As was the case for Canada overall, the proportion of current expenditure allocated to compensation of all staff employed in education was larger for the primary, secondary and postsecondary non-tertiary category than for the tertiary category in all provinces and territories (Table B.3.1; Charts B.3.2.1 and B.3.2.2). The proportion in primary, secondary and postsecondary non-tertiary varied from 70% in the Yukon to 85% in Nunavut; for tertiary, figures ranged from 55% in the Northwest Territories to 67% in Quebec.
Capital expenditure
In Canada in 2007, 10% of education expenditure for tertiary education was allocated to capital expenditure; the OECD average was 9%. More than half of the provinces allocated a higher proportion of tertiary spending to capital expenditure than did Canada overall and OECD countries in general: Manitoba and Quebec (11%), Saskatchewan, Prince Edward Island and British Columbia (12%), and Alberta (15%). Capital expenditure reflects spending on assets that last longer than one year and includes spending on the construction, renovation and major repair of buildings.
For primary, secondary and postsecondary non-tertiary, the proportion of education spending allocated to capital expenditure was less than for tertiary education both in Canada (7%) and in OECD countries (8%) (Table B.3.1; Charts B.3.1.1 and B.3.1.2). This was also the case in most provinces; Newfoundland and Labrador, Nova Scotia, and Ontario, where the proportions of education spending allocated to capital expenditures were similar in both categories of education, were the exceptions. In all three territories, capital expenditures in primary, secondary and postsecondary non-tertiary education accounted for between 8% and 12% of total education expenditure but were negligible at the tertiary level.
Definitions, sources and methodology
This indicator shows the proportion of budgets allocated to current and capital spending at different education levels. Expenditures are based on accrual and cash (or fund) accounting, depending on the data source(s) used by the provinces/territories. It also shows the proportion of current expenditure allocated to compensation of teachers and of other staff, along with other current expenditure.
The distinction between current expenditure and capital expenditure is taken from the standard definition used in national income accounting. Current refers to resources used each year by institutions as they carry out their activities. Capital covers assets that last longer than one year, including spending on new or replacement equipment and construction or renovation of buildings. Neither takes expenditure related to debt service into account.
The data for Canada reflect the 2007 financial year, and figures were drawn from seven Statistics Canada surveys: the Elementary-Secondary Education Statistics Project (now the Elementary-Secondary Education Survey); the Survey of Uniform Financial System-School Boards; the Survey of Financial Statistics of Private Elementary and Secondary Schools; the Financial Information of Universities and Colleges Survey; the Survey of Federal Government Expenditures in Support of Education; Provincial Expenditures on Education in Reform and Correctional Institutions; and Financial Statistics of Community Colleges and Vocational Schools. Information for OECD member countries, and the OECD averages, refer to data for the 2008 financial year and are based on the data collection on educational systems conducted jointly by three international organizations—UNESCO, the OECD and Eurostat—and administered by the OECD.
Note: The corresponding OECD indicator is B6, On what resources and services is education funding spent?.
Notes
- This indicator (B1) presents "expenditure by educational institutions", as data are collected by type of institution. Indicator B2 uses the term "expenditure on educational institutions", as the financial data are collected by source of funds, type of transaction, and level of education. As the two sources are not the same, the totals may differ.
- In Education at a Glance, the OECD publishes figures that have been adjusted for cost-of-living differences between countries using purchasing power parities (PPP). In this Canadian companion report, two sets of figures are published for Canada, the provinces and the territories: one in Canadian dollars; the second in US dollars after PPP conversion of the Canadian dollar. It was not possible to make a PPP conversion to adjust for cost-of-living differences between provinces and territories.
- The data for Canada in the OECD's Education at a Glance 2011 include Canada's expenditure on education abroad (e.g., National Defence schools overseas) and the undistributed expenditure of the federal government. Therefore, the OECD numbers for Canada are slightly higher than the numbers appearing in the tables in this chapter, which include only the expenditure in all the provinces.
- The methodology used to estimate research and development is explained in summary in the following document: Science statistics; Estimates of Research and Development in the Higher Education sector, 2008-2009, September 2010 edition, Catalogue number 88-001-X.
- The international data presented in this report reflect the figures available from the OECD at the time of writing; however, the OECD may have made further final adjustments. For more detailed information on the latest international statistics, please refer to Education at a Glance 2011: OECD Indicators, available on the OECD's Web site: www.oecd.org.
- Canada classifies expenditure by education level in a way that differs slightly from that of most other countries; that is, expenditure on pre-elementary education is grouped with expenditure at the elementary and secondary levels, while expenditure on postsecondary non-tertiary education (essentially technical and vocational training) is grouped with tertiary-type B expenditure. This should not affect comparability, however, since expenditure at the elementary and secondary levels is dominant.
- Business enterprises or other institutions providing short-term courses of training or instruction to individuals on a one-to-one basis are excluded.
- Elementary-Secondary Education Statistics Project; Survey of Uniform Financial System - School Boards; Survey of Financial Statistics of Private Elementary and Secondary Schools; Financial Information of Universities and Colleges Survey; Survey of Federal Government Expenditures in Support of Education; Provincial Expenditures on Education in Reform and Correctional Institutions; and Financial Statistics of Community Colleges and Vocational Schools.
- Due to early cut off dates for submission of data to the OECD, the figures for Canada presented in this report may not be the same as those published in the OECD's Education at a Glance 2011: OECD Indicators. The figures presented in this report represent the most recent available.
- In Canada, however, expenditures for postsecondary non-tertiary education are aggregated with those for tertiary-type B (ISCED 5B) education. This is not expected to have a substantial effect on ratios or data comparability, considering the minimal relative weight of this expenditure.
- The international data presented in this report reflect the figures available from the OECD at the time of writing; however, the OECD may have made further final adjustments. For more detailed information on the latest international statistics, please refer to Education at a Glance 2011: OECD Indicators, available on the OECD Web site: www.oecd.org.
- Date modified: